This month, the Federal Republic of Nigeria (FRN) is back in court for the next legal milestone in its ongoing fight for justice against BVI-based Process & Industrial Developments Ltd (P&ID).
Set to take place on 15 April, the upcoming Case Management Conference (CMC) follows last year’s unprecedented judgment, when the London Commercial Court ruled that the FRN had successfully “established a strong prima facie case” of fraud against the shell company P&ID.
The Judge, Sir Ross Cranston, delivered this ruling in the wake of new and substantive evidence presented by the FRN regarding P&ID’s allegedly fraudulent and corrupt activities. He also stated, “Not only is the integrity of the arbitration system threatened, but that of the court as well, since to enforce an award in such circumstances would implicate it in the fraudulent scheme.”
The FRN will now proceed to a full trial of the issues where the FRN’s substantive application to finally set aside the award will be heard. The timeline of this major trial will be set during the CMC.
It is the FRN’s case that P&ID used a sophisticated web of corruption and bribery to secure the initial gas deal, despite being grossly underqualified, with no technical capabilities and few employees.
The scale of P&ID’s highly orchestrated scam is still being unearthed and the FRN is relying on ongoing investigations across multiple jurisdictions to build its case.
To date, the EFCC investigations have found overwhelming evidence of corruption, including P&ID executives handing a $50,000 bribe – in a bag – to a former employee within the Ministry of Petroleum who oversaw the signing of the gas agreement.
The FRN believes that the GSPA was deliberately designed to fail from the outset. Evidence suggests that P&ID procured the agreement by paying bribes to former government employees. In return, these individuals allegedly overlooked the shortcomings in P&ID’s bid.
When the deal collapsed, P&ID launched arbitral proceedings against the FRN. It is the FRN’s case that the subsequent arbitration was conducted in a highly unusual manner and riddled with irregularities.
In 2017, the arbitral tribunal ordered Nigeria to pay P&ID just under US$6.6 billion, with interest payments valued at $1 million per day. The total sum is now close to $10 billion. If enforced, it would deny the Nigerian people a sum worth over ten times the country’s national health budget, during a time of national and global crisis.
Backed by a hedge fund and a litigation funder – including Cayman Islands-based Lismore Capital – P&ID has been aggressively pursuing the award through the international courts.
The FRN remains firmly committed to fighting the injustice of the award, and has been working hard to expose the allegedly corrupt practices of P&ID.
The upcoming CMC provides an invaluable opportunity for the FRN to reaffirm its unwavering commitment to overturning the award – and protect Nigeria’s national interest.